The AUDCAD currency pair updated its lows since the beginning of this year this week. This movement was quite reasonable because of the weak data released about the Australian economy. However, today there is an attempt to rebound in quotes.
Australian retail sales were published today. This macroeconomic indicator is the volume of sales on goods and services to final consumers for a certain period of time. Along with GDP, inflation and the unemployment rate, retail sales are also on the list of the most important macroeconomic indicators. Sales for the month are expected to decline by 0.3%. In fact, the data is better than forecasted and amounted to 0%.
Strong data on the Australian economy was immediately followed by the AUDCAD currency pair growth. It is believed that this growth will continue.
However, downside risks still remain. In case the U.S. government debt negotiations fail, the Australian dollar will continue to decline against the Canadian dollar. It should be realized that such a result is minimized.
Also, this currency pair depends on oil quotes, as Canada is one of the leading oil producers in the world.
In the coming trading days, the price of oil will be volatile. Russian Deputy Prime Minister Alexander Novak diminished the prospects for further reductions in raw material production.
The U.S. currency is strengthening for the fifth session against all major currencies. A stronger dollar makes goods more expensive for holders of other currencies and this reduces demand for them. The statistics indicate that the U.S. economy is stable even after a cycle of aggressive rate hikes by the Federal Reserve System, putting additional pressure on the price of oil.
According to the technical analysis, a reversal tweezers pattern has been formed in the AUDCAD currency pair. The current decrease in quotes looks excessive. The tweezers are signaling that the rebound is likely to continue in the near future. The resistance level, which corresponds to the price of 0.894, will be the upside target. Stop-loss can be set at the renewal of this week's low at 0.886.
Growth of the AUDCAD currency pair:
Take profit – 0.894
Stop-loss – 0.886
This content is for informational purposes only and is not intended to be investing advice.